Transcription

1 Lecture 3: Productivity and Labor

2 1. THE ISSUES a)productivity most important determinant of living standards in the long run 2008 U.S. GDP per worker employed (current $) $100,000 per worker per year $60 per hour worked b)measures of Productivity output per unit labor = labor productivity TFP = total factor productivity

10 2. DEMAND FOR LABOR BY FIRMS a)is there a labor market? Facts: There are many labor markets separated by -geographic location (area) -types of skills (physician vs lawyers) -level of skills (GP physician vs neurosurgeon) -labor unions and single employer markets Assumption: pretend that labor is a homogeneous input hired in a single competitive market Question: Are homogeneity & competition good or bad assumptions to make in labor market?

18 b) The impact of economic growth, i.e., bigger K: from A to B to C short run: (N, w /p) goes up (a lot) long run: N goes up a bit or not at all, w /p goes up a great deal.

19 Ex: Hrs worked now are shorter than 1OO years ago. Wages are much bigger. Cowboys worked dawn to dusk,6 days a week. Made $1 per day then( about $15 in today s dollars) for ten hours of work. 5. EMPLOYMENT STATUS OF U.S. POPULATION

20 Job Destruction and Job Creation

21 4. INCOME INEQUALITY AND THE COLLEGE PREMIUM a)facts about U.S. dist n of after-tax income Between 1979 & 2OO5 real household incomes went up as follows: Table Place in income dist n Raise % Top 1% 176 Middle quintile 21 Bottom quintile 6

22 Share of pre-tax income going to the top 1% 1928: 23.9% 1980: 10.0% 2007: 23.5% Share of total after-tax income going to the top 1% 1979: 7.5% 2005: 14.0% 1 (about 2.7% went to top of 1% ) 100 Income of Income of 95% percentile 20% percentile 6.3 times 8.6 times in 1967 in 2003

29 Note: median educational attainment for men was higher in both 1953 & 2005 Ditto for experience. Educational attainment & income % of households with at least one college degree: 62% in upper income quantile 27% for all households % of households with two or more earners: 76% in upper income quantile 42% for all households College Premium <E.Moretti, AEJ, 01/2013> (%) Nominal Wages Real Wages (adjusted for city living standard)

30 Ratio of Male-to-Female Earnings (full time workers) All workers Never married workers (mostly young) f) Causes of gender inequality hours worked: men work more overtime occupational choice: women choose careers that are easy on family life maternity and maternity leave aggressive negotiating by men (?) discrimination U.S. customers prefer white male employees to women/minorities statistical discrimination by employers

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